Stock Market Update

[BRIEFING.COM] The stock market saw a strong opening fueled by earnings reports, trade deal optimism, and lower Treasury yields that pushed the S&P 500 and Nasdaq Composite to new record highs. Some afternoon selling activity, however, thinned some of the major averages' early advances and left them with mixed results.

The afternoon sell-off was likely a case of moving to take some money off the table after a tremendous run, as the Q2 reporting gets set to ramp up this week. A lot of good earnings news has been priced into the stock market already. Nonetheless, there were some bright spots in today's market that were able to hold on to early gains.

Verizon (VZ 42.49, +1.65, +4.0%) was a clear winner today after beating EPS expectations by $0.03 and reporting revenue growth of 5.2% year over year, its strongest growth in the last 15 quarters. Cellular providers as a cohort benefitted from the move, with T-Mobile US (TMUS 232.62, +5.41, +2.4%) and AT&T (T 27.38, +0.44, +1.6%) capturing nice gains. AT&T is set to report its earnings on Wednesday.

The communication services sector (+1.9%) finished as the day's top performer and was further boosted by gains from its top component, Alphabet (GOOG 191.15, +5.21, +2.8%), ahead of its earnings report on Wednesday.

The consumer discretionary sector (+0.6%) was also a notable gainer, with cyclical stocks performing well throughout the day. The SPDR S&P 500 Retail ETF closed the day with a healthy 0.9% gain.

The majority of today's trade was spent with eight to ten sectors trading in the green, and stocks of all sizes displaying growth.

The market faced some selling pressure in the afternoon hours, however. Four sectors finished with a loss. The energy (-0.9%) and health care (-0.6%) sectors spent most of the day in red, but the financials (-0.3%) and industrials (-0.6%) sectors succumbed to the late pressure.

While stocks of all sizes saw early gains, the pullback was concentrated on smaller-cap stocks. The Russell 2000 was up as much as 0.9% early but finished with a loss of 0.4%. The S&P MidCap 400 (-0.6%) finished similarly after spending the majority of the session in the green. The Vanguard Mega Cap Growth ETF ended with a gain of 0.4%, outperforming the S&P 500 (+0.1%).

Ultimately, only 36.4% of S&P 500 stocks advanced today. The S&P 400 (34.75% advancing) and Dow Transports (35% advancing) also flashed red flags of narrow participation.

U.S. Treasuries started the week on an upbeat note with relative strength in longer tenors sending yields on 10s and 30s to their lowest levels in more than a week after last week's underperformance. Treasuries recorded the bulk of their gains at the open after an overnight rally in the futures market.

The advance sent the 10-yr yield (4.37%) back below its 50-day moving average (4.412%), while the 30-yr yield (4.94%) settled just above its 50-day moving average (4.920%).

• Nasdaq Composite: +8.6% YTD
• S&P 500: +7.2% YTD
• DJIA: +4.2% YTD
• S&P 400: +1.0% YTD
• Russell 2000: unch YTD

Reviewing today's data:

• The Leading Economic Index was down 0.3% in June (Briefing.com consensus -0.1%) while the May reading was revised up to 0.0% from -0.1%.